Former Russian Finance Minister: There is a shortage of money for pension payments in Russia
In an interview with newspaper Argumenty i Fakty, Former Russian Minister of Finance and Chairman of the Center for Strategic Research (CSR) Alexei Kudrin has spoken about a funding shortage in the Pension Fund of the Russian Federation.
Kudrin replied to a question of whether Russia retained enough financial resources "for a modest pension for seniors”, Kudrin responded: "I will tell you straight: yes, there is none left." He stressed that in 2016 "the state violated its obligations for the first time, and did not index pensions." A one-time payment of five thousand rubles "did not compensate for the fact that people were underpaid," Kudrin said.
"We are currently discussing capping payments to working pensioners. This is all due to a shortage of funds in the Pension Fund. Is it possible to close the gap at the expense of other sources - for example, raising taxes? No,” said Kudrin.
According to the former Finance Minister, the cost of retirement in Russia has grown by 3% of GDP for the past seven years, to 2.5 trillion rubles a year. "[This is] Almost as much as we spend on all the education in the country. It turns out that to pay even the current pensions, we would need to give up investment in education, medicine, the construction of new roads, [and] the future of our children," Kudrin stressed.
In September, it became known that the government refused to index pensions to working pensioners in 2018. They were also not indexed in 2017. Ordinary pensions in the government were promised to be indexed in full.
Proposals for raising the retirement age in the government have been under discussion since 2015. The current retirement age for women in Russia is 55 years; for men it is 60 years. Most CIS countries have higher threshold ages.